Thursday, 25 October 2018

Keynote at UN on blockchains - transcript

Blockchain Technology and
Transformation in the Face of a Climate Emergency

Professor Jem Bendell

The text of the opening Keynote
Speech at the UN Blockchains for Sustainable Development Session at the World
Investment Forum 2018, UNCTAD, Geneva, October 24th 2018. Delivered in the
Human Rights room to 700 attendees, in the European UN HQ.

“What a difference a few years makes. In 2012 I was in
Davos, for the World Economic Forum. In the conference corridors, wide eyed and
talking excitedly about the need for us to create new digital currencies and
use blockchains.

I remember
being looked at like a lunatic. Even by the tech entrepreneurs! And here we
are, 6 years later at the United Nations. I might still seem a bit of a lunatic
but at least I’ve got a bigger crowd. And a smarter one at that.

In those
intervening years, billions in investment has been secured, indicating the potential
some see in blockchains and distributed ledgers.

Mainstream
media has also got in the on the act. One week they tell us blockchain will
save the world. And the next that it will destroy the world. Never, in the
history of humanity have people got so animated about something as exciting as a
type of database.

OK, so
blockchains are a bit more than a type of database. But I emphasise the
simplicity of the technology here because I believe it’s not actually the
technology that will deliver net positive outcomes for humanity.

It never is.
That’s why this session is useful. So we can discuss intentions and contexts.
It is why I’m pleased my University is involved in co-organising the session,
and grateful to the Blockchain Charity Foundation for supporting our work and
being here today. It is impressive that UNCTAD have taken the initiative to provide
member states and others the opportunity to learn more about the pros and cons
of new technologies.

So let me first
cover some basics so that we are all on the same page. A blockchain is a record
of data that is comprised of blocks which are added over time from a
distributed network of participating computers. It means the data can’t be
changed, hacked or lost. Blockchain was invented in 2008 to serve as the
transaction ledger of the digital currency called bitcoin. Blockchains support much
more than digital currencies now, as they offer immutable records that can be
public and enable interoperability. This is interesting many governments that
struggle with legacy IT systems that can’t talk to each other. Another function
of blockchains that is driving interest is called a smart contract. That is a
contract between two parties where a payment can be made automatically when a
shipment arrives, or where dividends are paid automatically when profits reach
a certain level. The technology moves fast and although we use the term
blockchain here today, there are promising post-blockchain systems like holochain,
which appear more nimble. But the general promise of all these distributed
ledgers is greater data transparency, coordination, and automation.

Today, we
will hear a range of examples of how distributed ledgers are being deployed for
useful outcomes. One example we will hear of is in Kenya where blockchains are
combining with grassroots initiatives to provide some of the poorest in society
with new currencies to trade with each other. Another example I like is a
cryptocurrency called Stellar that enables payments via chains of credit or,
simply, promises, between account holders.

Many useful
services have been built on top of these new rails, including non-cash
remittances used by microfinance organisations across Africa. As this field is
moving so fast, it is great that we will be hearing the latest from our
panellists, as well as at the side event by UNRISD this afternoon.

Despite some
positive examples, the use of these technologies for everyday applications is
still rare. Some say that blockchain-based cryptocurrencies like bitcoin are
dangerous to our financial system, our security and the environment. How we can
address those concerns is something to discuss. As is the matter of how these
technologies could be used to address critical dilemmas facing humanity today.

When
exploring these questions it’s helpful to keep an open mind. With any kind of
technological advance, we may look at it with a mix of intrigue, wonder,
confusion or concern. But let’s not be naïve optimists or blind sceptics about
technology. And let’s not be bystanders. Because technology is neither
inherently good or bad for humanity. Instead, it needs responsible management to
maximise its intended benefits and minimise its unintended drawbacks. That
perspective means we can look at blockchain and crypto currencies and seek to
guide their development for positive public outcomes. To do that well will
require wider stakeholder participation in shaping the direction and governance
of this technology.

The
Sustainable Development Goals offer one framework on public need. And we will
hear of a range of efforts on different SDGs from our panellists. But I’d like
to invite us to consider something bolder, more urgent. Although climate change
is included in the SDGs, the latest report from the Intergovernmental Panel on
Climate Change invites a reprioritisation. It implies that climate change is
now a planetary emergency posing an existential threat to humanity. The artist
who made this ceiling said he was inspired by a mirage in the Sahel where
trees, donkeys and people all appeared to be melting up into the sky. We could take
that a dramatic metaphor, in this human rights room, of the human face of
climate change. So as our climate spirals away from one friendly to our
civilisation, we need to face up to why we have been so incapable of changing
our ways, collectively, at scale.

Despite
decades of deliberation and initiative, carbon emissions continue to rise. One
reason we have not stopped that is because action has always been an add on,
not a starting point for our systems of economic organisation. So although it
is typical for conversations like ours today to focus on how to improve the
current global system, I want to ask us to consider something far bolder. That
is the need to transform our economic system – and fast.

So here is
the critique – and it’s not a shy one. Currently, stock markets incentivise the
maximisation of company growth and profitability. That can encourage firms to
manipulate people to consume more, while externalising costs onto society and the
environment. But a deeper driver of humanity hitting natural limits is our monetary
system, which is based on privately-issued debt. Nearly all electronic deposits
are created by banks as interest-bearing loans. For the system to function
normally, more of our Earth’s resources must be consumed to generate yields to
service those debts. Otherwise, when existing loans are paid off, our money
supply would dry up.

This system
was OK for a time, and OK in some places. But not now. The climate chaos we
face is nature’s answer to our hubris that we could expand forever.

A systemic
redesign of our banking and corporate systems is long overdue. Until now, people
in senior roles have preferred less awkward explanations of our problems. But
now that complacency has become a grave threat to life on Earth. We now know
that many self-reinforcing feedbacks have begun to further warm the planet,
threatening to take the future out of our hands. So if we don’t wake up from
our delusions of what is pragmatic and appropriate, then shame on us.

What to do
now then? It means there must be a gateway question for any new technology: how
is it going to help us build resilience and reduce harm?

When I look
at blockchain technologies and crypto currencies, I therefore look at what
opportunities there might be to transcend our self-harming monetary and
corporate systems. No less a question is sufficient given our planetary
emergency.

So here are
some questions that might arise from that starting point. Could we see forms of
company financing through digital token sales which don’t necessitate share-price
competition and the perpetual growth of corporations? Could we see forms of money
that are tied to natural ecosystem maintenance, or issued fairly to people for
work of real value? Could blockchains be designed to be as energy efficient as
possible? Could they be designed not to enrich speculators or create new
monopolies? Could they be designed to enable upgrades driven by the
beneficiaries, rather than commercial interests? Could blockchain projects take
an integral approach, where the code itself and the internal governance are
aligned with sustainable outcomes? In technical terms, the answer is absolutely
yes. But sadly these approaches have been marginalised if they do not promise a
quick buck.

I will give
you one example. Today, in 200 communities around the world, people are
swapping goods and services with their neighbours without using any money,
using software from the Credit Commons Collective. Because of a handful of
volunteers, these communities don’t need to pay a company for an app, don’t see
adverts, don’t have their data harvested, and they own their installation of
the software. These people, around 30,000 of them, are using very basic
software because no one is funding its upgrade. Because there’s no profit in
it. So if we want transformative change, we will need a shift in ambition from
our philanthropists and aid agencies to one of transformation.

Currently
social impact projects using blockchain may be useful but are often based on
sub-optimal technologies. As we face an existential climate crisis, it is
simply not good enough to base environmental initiatives on systems with code
that is toxic for our climate. That is once again a reminder that we need
collective leadership to shape blockchain and crypto currencies for significant
and scalable public benefit.

So as we
discuss the potential of these technologies, let’s remember that any technology
is really our knowledge and system for creating things. That depends as much on
our intention as it does on any code or gadget. So as we look at the difficult
times ahead, our intention for creating things needs, more often, to arise out
of our love for humanity and creation. The technology we seek is not some new
distributed database. The technology we seek is love.

So, as we
hear the contributions in this session, I recommend asking how specific initiatives
are empowering people and responding to our planetary emergency. If that is the
basis of our conversations here today, then this is a useful gathering indeed. So
please don’t hold back. Thankyou.

Professor Bendell teaches an intensive residential course on blockchain and society, in London, April 1st to 4th. Explore here.

More information on Bendell's recommendations for Integral Blockchains is outlined here.

More information on the near term threat of collapse from climate chaos is available here.